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New product liability legislation

On February 20 2009, the Act on Liability for Damages Arising from Unsafe Products, BE 2551 (2008) comes into force, one year after its publication in the government gazette. Although the Act is short, with only 16 sections, it introduces several new concepts concerning the liabilities of manufacturers and resellers of products defined as unsafe products:

  • joint liability of manufacturer, importer and reseller;
  • claimant must only prove that damage arose from use of the product, in an ordinary way, without having to prove any fault on the part of the defendant;
  • the defendant has the burden of proving that the product was not an unsafe product, or that the claimant knew that the product was an unsafe product, or damage was caused by incorrect use of the product;
  • an agreement limiting liability is not a bar to liability;
  • the measure of damages may include mental damages, and in certain cases penalty damages of two times actual damages; and
  • the prescription period is three years after date of injury, or 10 years after the date of sale of the product.

Claimants under the new product liability law will enjoy rights as consumers under the Consumer Case Procedure Act, BE 2551 (2008), which came into force on August 24 2008. This Act reduces the time and costs of initiating actions against providers of goods or services and provides accelerated procedures for the hearing of cases. The court has the power to collect evidence from the business operator (a limited form of discovery that is a new procedure in Thailand) and to initiate a product recall. In certain cases, the court also has the power to pierce the corporate veil of a juristic business operator.

Lenders will be concerned that their customers have put in place safeguards as permitted under the new law, as well as appropriate insurance cover.

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